File No. 893.811/158.
[Inclosure.]
The Chairman of the Central Committee of the
American National Red Cross to
the Secretary of State.
American Red Cross, National
Headquarters,
Washington,
November 10, 1914.
Sir: Receipt is hereby acknowledged of
your favor of November 2, transmitting paraphrase of a telegram
received on the same date by the State Department from the American
Minister at Peking, regarding the need for immediate relief work in
the Huai River region in China. It is also noted that the telegram
itself expresses the hope of the Minister of Agriculture and
Commerce of China that the American Red Cross will use its good
offices toward consummating the Huai River loans immediately, so as
to furnish employment and relief for those who are now suffering
from the floods.
On the 30th of October the Red Cross received from the Chinese
Minister in Washington a request of somewhat similar import to the
one transmitted from Peking by the American Minister, and on the
following day we replied to his excellency, the Chinese Minister, as
per the copy herewith. This gives a review of the present financial
situation touching the proposed loan which will be necessary to
realize the expectations of China, and I hand it to you as the best
reply we can now make to the suggestion of the Minister of Commerce
and Agriculture in Peking.
The Red Cross has not failed to keep in close touch with the banking
element in the United States who, should Chinese bonds be offered,
would necessarily be concerned in their placing, and we are
satisfied that at the present time it would not be possible to
obtain from reliable bankers in the United States an underwriting of
such an amount—estimated at thirty million dollars ($30,000,000)—as
would be required to execute the proposed works.
[Subinclosure.]
The Chairman of the Central Committee of the
American National Red Cross to
the Chinese Minister.
American Red Cross, National
Headquarters,
Washington,
October 31, 1914.
My Dear Sir: I have the honor to
acknowledge the receipt of your letter of the 30th instant, in which
you mention receipt of the text of the report of the Board of
Engineers which I had the honor to submit to your excellency on
October 28th. I also note that you are ready to take up with Miss
Boardman the question of the placing of the loan, in the issuance of
which the Red Cross has undertaken to exercise its good offices with
the American bankers.
Until the full report, with all requisite maps, is completed and
published, it will be impossible to obtain the opinion of bankers
upon the underwriting of the Chinese bonds that must be issued, for
they will certainly wish to have the advice of their own consulting
engineers respecting the feasibility of the undertaking and the
value of the assigned revenue.
Respecting this presentation of the business to the bankers we are
embarrassed, in deciding whether or not in submitting the report
proper we should also make known the opinion that the Minister of
Agriculture and Commerce of China has expressed as to a feature of
the design of the board that must be adhered to, if the revenue
assigned for the service of the bonds shall have any adequate
positive value.
As at present advised, and until it is known whether your
excellency’s Government adopts or rejects the view of the Minister
of Commerce, we are inclined to submit to the bankers only the
report proper, for if the expressed opinion of Mr. Chang Chien
(which it is felt might properly be considered as inopportune, since
he has not seen the official report) were submitted to the bankers,
we do not believe the project would receive a moment’s
consideration.
We are expediting the completion of the maps, etc., so that there may
be a full presentation of the project at the earliest possible
moment, of the result of which you will receive timely advices.
Your excellency will not be surprised to learn that we fear the
present disturbed condition of the world’s finances—due to the
European war, which also involves to some degree the Orient—makes
the attempt to place at this time any large loan, for any purpose,
anywhere in the world, most inopportune. We fear that we will be
told that until the warring nations are all at peace, and the
territory of China shall no longer be involved in this world
warfare, the bankers will be unable to place the bonds required for
this great work of Chinese internal improvement, in which
accomplishment the Red Cross has a purely philanthropic interest, an
interest that China has already recognized and commended.
It is true that the period of time within which the Red Cross was
given by China certain exclusive rights to develop the project and
negotiate for funds is drawing to a close, but when these
obligations to further the interests of China with respect to this
conservancy project were assumed by the Red Cross, no one had in
mind the possibility that before the expiration of the period
allowed all but one of the great powers of the world, and some of
the lesser, would be engaged in the greatest conflict that has ever
occurred in the history of mankind, a convulsion that is so colossal
in magnitude and so far-reaching in its effects upon commerce,
industry, and finance that disturbed conditions everywhere have
taken the place of system, method and stability. But these
conditions must, sooner or later, come to an end, and when they are
normal we believe that the means may be found for financing the
proposed Chinese loan, if the project has the unqualified
indorsement of China; and the Red Cross will always be ready to lend
its aid in accomplishing the result we all desire. Of course, China
can insist on holding literally to the terms of the optional
agreement, which, as to time, will expire within a few months.
The United States is the only one of the great world powers that is
not a party to the present conflict, and, fortunately, is possessed
of large financial resources, so that when the conflict is ended
America will soonest be ready to finance such an enterprise as the
Huai River Conservancy.
If China should regard the promised good offices of the American Red
Cross as an asset of value after the termination of the period
specified in the provisional
[Page 116]
agreement of last February, it would be very satisfactory for us
to know this as soon as practicable, for our interest in this great
humanitarian work is unabated and we wish to leave nothing undone,
now and hereafter, that might contribute to the desired result.
I have [etc.]
